Somerset Refinery is back in business

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July 16, 2009

Local fuel producer finally reopens its doors after prolonged ownership battle in court

By HEATHER PYLES, CJ Staff Writer The Commonwealth Journal Thu Jul 16, 2009, 11:33 PM EDT

Kevin Williams best describes his job at Somerset Refinery as “a chemical engineer’s playground.”

That sentiment couldn’t be more true.

Within a small laboratory building located on the Somerset Energy and Refinery — formerly Somerset Refinery — grounds, Williams, a chemical engineer, and another engineer work to test samples of fuel that go through the refinery to ensure the product meets strict environmental and market standards.

Williams points out a machine used to test gasoline for levels of sulfur — a substance that has been pegged as the cause of destructive acid rain. The sample recently tested has acceptable levels of the substance — as in, next to zero.

Another machine tests for octane, and another tests for corrosive properties. In a different work area is a section dedicated to testing the water of the small creek that runs through the refinery property. Williams notes that it’s extremely important that the creek — full of bluegill, minnows and turtles — stays clean.

The refinery has been officially operational for close to a month and unofficially operational since May, and the differences between today’s Somerset Energy and Refinery and the former Somerset Refinery is like night and day.

“You really would not believe the difference now versus before the construction,” said employee Eddie Phelps.

The business was shut down amid a slew of environmental and financial woes several years ago, but in 2008 a light at the end of the tunnel appeared when Michael Grunberg, an international real estate and investment magnate, bought the ailing refinery for $2.2 million.

After a six-month process that included structural upgrades to help the refinery adhere to current safety and environmental standards, the business resumed operations with 55 employees — many of them former employees — and chief operating officer John Lawson predicts they’ll employ some 150 people within the next two years.

That is no doubt good news for a community that’s still reeling from a weak economy.

“My ambition, my goal would be to provide jobs ... technical jobs, engineering jobs for people that grew up here and want to live here because there’s not really an opportunity for that in this part of the state,” Lawson said. “It’s nice to be able to provide a decent living, a decent wage for all the folks in this area.”

Folks like Williams, a Casey County native, along with plant manager Kris Gibson, a Somerset native.

“The community needs the jobs, that’s for sure,” Gibson said on Thursday. “It got me back home.”

And now that the refinery is back in operation, its employees are dedicated to making a quality product — helped along by what Lawson calls excellent product from the region.

“It’s gotten to where we trust the crude that comes in,” Williams said.

The refinery purchases crude oil, which is oil in its unprocessed stage, from Kentucky, Tennessee and Virginia.

“A lot of people do not know this, but Kentucky crude (oil) is an excellent crude,” said Lawson, who recently returned to his home state from Chicago to take the position at the refinery. “(It is) high quality. The Eastern Kentucky crude is some of the best in the world.”

The refinery processes crude oil into several different products, including gasoline, kerosene and diesel, and it doesn’t let one bit of the commodity go to waste.

“The idea is to use every drop of oil,” Lawson said.

Additionally, the refinery is looking at opening or reopening at least 12 different gas stations across the state. Several are already operational. The refinery supplies fuel to small businesses and convenience stores and it will also begin supplying heating fuel by the tank to residential customers as well

“ A lot of folks heard we were in the process of opening, but they don’t necessarily know we’re selling products.” Lawson said.

Lawson said the company’s goal is to increase production by about 200 percent — from 3,000 barrels a day to 6,000 — within the next 18 months.

Those at the refinery are concentrating more than ever on adhering to environmental standards. Lawson said the business’ annual budget allocated for environmental guidelines is around $250,000.

“We try to be good green environmental citizens,” Lawson said. “We do all we can do to be clean.”

The refinery is in the process of undergoing upgrades to its secondary containment features, which can be the difference between a contained leak and an environmental hazard.

A system dedicated to removing sulfur from the products is also being developed.

“Safety has been a factor like none other in the past,” said Phelps.

In all, upgrading costs will amount to around $15 million.

But, Lawson said, it’s worth it, if the refinery hopes to being a quality product to its customers and if it hopes to provide a means of living to even more people in the community than it may have before in its nearly 100-year history.

“A lot of folks in this area have put food on the table over the years through this refinery,” Lawson said. “We’re proud of that.”

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